In the last lecture, I talked about how the West may well be in the age of decadence, and devoted much of the talk in explaining how financial and monetary systems have been manipulated over the centuries to bring about unfair distributions of wealth. That lecture was, I have to admit, largely pessimistic in tone. So, I think it is time to change the mood. In the last lecture I said that we could consider our age of decadence as a reason for hope: we stand on the cusp of change. The old, failing systems will be replaced and a new civilization with arise, one that is better placed to enable transhumanist dreams of individual excellence and social well-being. What would money be like in a next-gen civilization?


A fairly common assumption among transhumanists is that, in the future, there will be no money. The thinking behind this assumption is that the current system demands endless growth and a neverending search for higher efficiency from the workforce. Human beings are limited in how much mental and physical work they can do, and those limitations encourage R+D in automated manufacturing and AI. Transhumanists by and large take it as given that one day artificial intelligence will be smart enough to be relied on to do absolutely anything needed to keep the economy going. It is also assumed that robots could be designed to want to work for free. They would toil away, twenty-four hours a day, seven days per week, never taking a holiday, never expecting any pay. There would be no wages and everything would be free.

Now, I can definitely see AI and robotics squeezing humans out of the job market, if AGI is realized. And I hope it is, because I believe that humans have better things to do than be components in some process for no reason other than the pressures that force one to volunteer for wage slavery. And I do rather like the idea of everything being free. Wouldn’t it be nice to go on Amazon and be able to order anything from a pencil to a luxury private jet, and not have to pay for any of it?

Well, yes, it is nice but perhaps not all that realistic. I do not believe money will disappear, because it serves more purposes than just paying wages. It is (or can be) a useful tool for allocating resources, helpful in calculating the right quantity of a product so as to match preferences of consumers with the activities of producers. Money helps facilitate the processes by which natural resources are converted into the things we need and the things we want. Even if we one day have robots running the economy, it is still an economy. That means the robots would have to do the same kind of calculations that drive resource allocation and matching of supply with demand that money is designed to facilitate.


So, there will be money in the future. But not simply more money (which would just mean more debt if we are talking about a debt-based fiat currency) but rather more kinds of money. These new types of currency would have functions designed to promote those psychological traits that would encourage societies to develop in positive directions. Now, obviously, ‘the best possible society’ is somewhat subjective but I do think it is possible to sketch out the conditions for a positive society that most sensible people would agree stand a good chance of encouraging social cohesion and individual excellence. In a market economy we have competitors, and that means winners and losers. But what kinds of winners and losers should we hope for?


Ideally, success in the marketplace would be none-zero sum. In other words, your ‘win’ as an individual or company should have a positive outcome for society as a whole. The most obvious way to achieve that would result would be if monetary and financial systems were focused not on making money out of money (which, as explained in the last lecture, actually entails inventing ways of extracting wealth from those who contribute to the real economy and giving it to those who gamble in a global virtual casino) but rather on productive enterprise: Producing goods and services that make people’s lives better in some way. What would also help bring that kind of market about would be effective matching of supply and demand, using natural resources as efficiently as possible, and removal of all barriers to entrepreneurship.


There will inevitably be losers. After all, people have varying skill levels; some get lucky breaks and others do not, and not all products and services will strike a chord with the general public. But what should losing mean? Being a loser in a hypercompetitive society can be pretty dire: A slide into economic exclusion, homelessness and despair. Under such circumstances, losing seems like a punishment. But it need not be so. There is an old saying: ‘we learn from our mistakes’. What that saying tells us is that losing can be an opportunity, a way of educating ourselves through experience. The best way to change ‘losing as punishment’ into ‘losing as learning’ would be to have social safety nets in place which would prevent people from falling so far that they have little hope of clawing their way back. Does that necessarily have to be safety nets enforced by government, taking money from those who succeed in life so as to provide support for those who don’t? I do not think so. In a more altruistic, collaboratively orientated society, I would expect people to have a more charitable outlook. There would be a fairer and more just view that some resources should be considered the common heritage of all citizens, not the private possession of a minority. Could it be that, one day, would-be winners strive to be rewarded with the admiration of their peers and the veneration of society, but consider mere material wealth to be something people should have roughly equal access to? If the world were not so aggressively competitive, I do not see why not.


If you are trying to capture a corner of the market, you can be sure that there are competitors trying to achieve the same goal. How should you view these rivals? As deadly foes who you need to destroy by any means you can get away with? That attitude does not seem conducive to the development of greater social cohesion to me.

Instead, why not view your rivals as collaborators who are exploring alternative ways of achieving whatever result your own product or service is intended to achieve? I know of at least one entrepreneur who has that kind of attitude. As most of you doubtless know, Palmer Luckey is the founder of the company Occulus VR, which hopes to bring to market a VR-headset. A common device in science fiction, VR headsets never really took off as a viable consumer device and were relegated to expensive setups for military use and other organizations with very deep pockets. But then Palmer Luckey assembled a prototype VR headset which provided proof of principle that an effective headset could be produced, and for a cost that made it suitable for a mass-market demographic.

Needless to say, by revitalizing the possibility of decent and affordable VR headsets, Occulus inevitably found itself one player in a market of competitors out to capture the same corner of the market. There are now at least ten rival headsets in development, from kickstarter-backed products to ones in development by electronics giants such as Sony.

But rather than view those rivals as foes to be destroyed at all costs, Luckey considers them useful allies. It only adds to the evidence that VR can be a viable mass market product if many rival companies- including big names in home entertainment- are also trying to bring such products to market. Do not get me wrong, I am sure Occulus VR want to be number one. But the greater good is the successful development of commercial VR. So Luckey considers those rival headset manufacturers as competitors for the number one slot, but also as collaborators in the meta-goal of finally bringing mass-market VR out of sci-fi and into reality.

In a marketplace that emphasized non-zero sum results and social support and decent standards of living for all people, I would expect more companies to have Occulus VR’s attitude to their rivals: Not foes, but collaborators exploring alternative paths to the same desired end.


How to rearrange our financial and monetary systems to achieve this outcome? Some people think the answer is to do what Robin Hood did, which is to take from the rich and give to the poor. But that kind of wealth redistribution was more justified in Robin Hood’s day because England at that time operated under a feudal system. In feudal economics, the rich get richer by expropriating property and forcing people into servitude. In a market-based economy, though, people can become wealthy by producing goods and services that many people find improve and enrich their lives in some way. Arguably, the money thus acquired is better left in the hands of such people, where it may be invested in further products and services, rather than simply taking it from them and redistributing it among people with no track record of entrepreneurship.


If simple wealth redistribution is not the solution, what is? The answer has to be: Reconfiguring the economy so that it provides real opportunities for everyone. The good news is that this is already being done. Around the world there are examples of communities redesigning money to achieve results where conventional money fails. Those communities range from families in deprived towns seeking ways out of poverty, to multinational companies looking for ways to remove obstacles to trade.

The alternative currencies these experimenters have developed are identified under various names. There are ‘local currencies’, so-called because they are designed to work within a limited area. There are ‘cooperative currencies’, or money who’s functionality is designed to encourage cooperation among its users, rather than competition. The groups and organizations that invented these alternative currencies understand that money can be remodeled with a specialized outcome in mind. It is possible to link unmet needs with resources that are underused by conventional currencies; to encourage desired behaviors such as providing care for the elderly or revitalizing failing communities. Although they have various names, denoting the outcome they are purpose-built to achieve, there is one name that all these new kinds of money can be labelled as: Complementary currencies. This is because these alternative currencies are not intended to replace conventional money, but rather to work in tandem with it, helping to make financial and monetary systems less competitive and hyperagressive and more socially responsible.


So, how do you redesign money? First of all you need to understand what money is. In my last lecture, I said that the definition of ‘real money’ was ‘that which is used to pay taxes’. But that was more accurately a definition of what gives fiat money value. I also said that just about anything can be used as ‘money’- beads, shells, bones- you name it. This is because money is not really a physical thing at all, it is just convenient to have it represented by some physical thing. For anything to act as money, a community is required to agree that this particular thing is acceptable in an exchange. Money is therefore a social contract, like marriage. It is real, even if it only exists in people’s minds.

Ok, so money exists by social agreement. As money is really a form of social contract, it can be rewritten to, say, keep separate exchange circuits of different natures (as local currencies do by being invalid for use outside of the area for which they are designed) or for different monetary functions. For example, conventional money operates both as a means of payment and a store of value, and those dual functions are really rather conflicting. On the one hand, money is meant to function as a means of exchange, and is therefore intended to be spent. But on the other hand, its role as a store of value means there is a built-in tendency to save it, which of course takes money out of circulation. Cooperative currencies are designed to facilitate transactions by being a medium of exchange exclusively. They tend to have lower intrinsic value compared to conventional currencies, but, since money that is not used as a store of value will tend to circulate more than money that tends to be accumulated, cooperative currencies make up for their lower intrinsic value with their higher velocity. The economist Irwin Fisher proved that the volume of economic activity is not just dependent on the quantity of money in circulation but also on the number of times it circulates.


I think it is time to start talking about some examples of alternative currencies. The first one I want to talk about shows there is much truth in the saying that one person’s trash is another person’s treasure, for it concerns a currency that encouraged perhaps the highest percentage of recycling in the world.

This story takes place in Caributa, which is the capital of the southeastern state of Parania, Brazil. The favelas had a particular problem with garbage. The terrain they were built on was very hilly, and the pathways were too narrow to allow trucks to enter in order to carry away refuse. Furthermore, there were insufficient funds to deal with all that trash.

The government, which was then under the leadership of Jaime Lerner, noted that there were a couple of underutilized commodities. There was a municipal bus system that was underused, and there were a lot of people with time on their hands. So, large metallic bins were placed on the streets at the edge of the favela neighborhoods, and whoever collected and sorted the trash received tokens to ride the bus system.

The sixty-two poorest neighborhoods alone exchanged eleven thousand tons of garbage for a million bus tokens and one thousand two hundred tons of food (the bus tokens were soon accepted as money at local markets). In a three-year period, over a hundred schools traded two hundred tons of garbage for one point nine million notebooks, the paper-recycling component alone saving the equivalent of one thousand two hundred trees per day. Sixty to seventy of Curibata’s trash is recycled in-situ, which, as I said, is probably the highest percentage in the world.

The system then moved beyond the favelas to other areas that had a problem with garbage. As Jamie Lerner explained:

“We didn’t have the money to clean our bays. So instead we made agreements with our fishermen. When they catch fish, the fish belong to them. When the days weren’t good for fishing, they catch garbage, we pay for the garbage with our tokens. The more garbage they fished, the cleaner the bay became; the cleaner the bay became, the more fish they catched”.

Various cooperative currency schemes were used to tackle various initiatives. By inventing a currency that utilized underused commodities and resources, and extracting wealth from trash via recycling, Curibata funded environmental cleanup, job-creation, city restoration, and improved education. And, what is more, it achieved all that without having to raise taxes or go to organizations like the world bank for a loan.


Now, maybe some of you are thinking “yes, well, this is just an example of poor and desperate neighborhoods doing menial work for a bite to eat, and a means to travel to look for more work. This does not prove cooperative currencies can do much for wealthy countries”. Perhaps, then, we should next look at a cooperative currency that operates in a rich country.

Switzerland is blessed with an economy that is among the most stable in the world. A major contributor to the country’s resilience is a business-to-business currency and a dual currency banking institution. This currency, which is known as the WIR, can trace its origins back to the 1930s. This was, of course, the time of the Great Depression. Two businessmen, Werner Zimmermann and Paul Enz, were faced with bankruptcy, having received a notice from their respective banks that credit was going to be reduced or eliminated.

It was clear that one company needed a loan to buy goods from another company, and that company, in turn, needed money in order to buy material from its own suppliers. So, Zimmermann and Enz got together with a dozen or so other business associates, and they created a mutual credit system. In simple terms, it worked something like this:

A baker requires ingredients which a farmer can supply and so, said baker incurs a debit from a local farmer in exchange for whatever produce he needs. The farmer uses that credit in order to obtain supplies from another business, while the baker supplies somebody with baked goods, which brings his balance back to zero. These transactions all take place without being mediated by conventional money.

This system saved the businesses involved, despite a massive press campaign that the country’s banks mounted, intent on preventing the idea from ever taking off. These people then created their own currency, the WIR. The value of the WIR was identical to the national currency (i.e. one WIR equaled one Swiss Franc) but it did not bare interest. All debts in WIR have to be settled in WIR. There is no convertibility into national currency. A cooperative was set up among the users to keep the accounts dealing with that currency.

The WIR is not represented by paper money, but is instead an electronic currency. Business in WIR is conducted by cheque, credit card, and mobile phone payments. As of 2010, some sixty-thousand businesses or sixteen percent of all Swiss enterprises, were trading in WIR. Depositors tend to be small and medium-sized businesses, but more than a third of all construction companies in Switzerland use WIR, and construction is a massively capital-intensive sector.

So, how does WIR help with economic stability? As with most cooperative currency schemes, WIR does not replace the national currency but rather works in parallel with it. There is a countercyclical nature in the way WIR is issued. During times of recession, when regular banks reduce their lending, more WIR is used. When the economy is in better shape and banks are lending again, there tends to be less WIR in circulation. What this achieves is a smoothing out of the booms and busts of the Swiss economy, which contributes significantly to the country’s economic stability.

This conclusion was backed up by several macroeconomic studies conduced by Professor James Stodder of the Rensselaer Polytechnic Institute. According to these studies, “growth in the number of WIR participants has tracked Swiss unemployment very closely, consistently maintaining a rate of about one-tenth the increase in the number of unemployed”. What this means is that, whenever the conventional Swiss Franc economy slows, job losses are spontaneously reduced as more people join the WIR economy.


You may have noticed a rather strange attitude that the conventional banking system has, which is a seeming reluctance to invest in productive enterprise. Of course, this would come as no surprise to those of you who attended my last lecture, since I explained that in an Age of Decadence those in positions of power are more motivated to take money from others rather than make it, and so loans for investments in actual goods and services are minute in comparison to money created for the purpose of wealth extraction. Furthermore, the way conventional money is created (by bank debt) has the effect of amplifying the ups and downs of the business cycle. When business is good, banks are likely to be generous with credit, which can potentially amplify a good period into an inflatory boom period. But should the business horizon darken even slightly, banks reduce credit availability, which can easily lead to full-blown recession.

Avrinede Ives Cordeiro, a resident of Conjunto Palmeira, Brazil, and now a very successful local businesswoman, has first-hand experience of the reluctance of banks to lend money for investment in productive enterprises, particularly when you are poor:

“Any person of low income that visits a conventional bank is likely to have his or her dreams crushed in an instant…there is a complete disconnect between the priorities of the banking system and the real economy… we had no access to credit or any other financial service in our town”.

Now, I did say Cordeiro became a successful businesswoman, so she must have found some way out of the poverty trap. And that way out was a dual currency community banking system- Banco Palmas. Banco Palmas was established by Joao Soaquim de Melo Neto Segunda, following a neighborhood meeting he attended in Conjunto Palmeira in the late 1990s. The community had conducted research which mapped consumption patterns of the population of the area. It was estimated that around one point three million Brazilian Reals circulated within the community, but eighty percent of that currency quickly left the local community. As Segunda explained:

“We’re poor because we lose what we have, and additionally we lose what little savings we have. So neighborhoods are not poor, they become poor. And that realization was the beginning spark of Banco Palmas”.

This community bank issues two kinds of loans: consumption loans and production loans. Consumption loans are used to cover essentials like food and clothing. Such loans are issued in the local currency, which is called Palmas, and are not convertible into national currency. There is no interest fee and just a flat one percent fee for administration. Consumption loans are relatively small cash infusions, equal to around £50 at most. Production loans range between $5,000 to $10,000. Unlike consumption loans, they can also be provided in national currency. If that is the case, an interest fee is attached to them. Banco Palmas has created more than one thousand eight hundred jobs and there are now similar dual currency banking systems operational in some sixty-six communities around Brazil, with the full support of the Brazillian government and the nation’s central bank.

Avrinede Cordeiro said, “thanks to our community bank, we have managed to have access to these services…Every time I needed help, people at Banco Palmas were always ready to provide it”.


So far, these examples of local, dual, and cooperative currencies have not been too dissimilar to conventional money. They may not charge interest; they may only be valid in a localized region, but other than that there is not much that turns conventional thinking on its head.

But, since we are talking about redesigning money, sometimes radical thinking does occur. This is the case with LETS and its attitude toward a negative balance. LETS- it stands for Local Exchange Trading System- was invented in Courtney, a town near Vancouver in Canada. The reason for its invention is, yet again, the failure of conventional money to serve the real economy of goods and services. In the early 80s, forty percent of the population of Courtney were unemployed. Although there was plenty that needed to be done and a large labor force willing to do it, a lack of money meant the requisite transactions could not take place.

As Micheal Linton explained, “The greatest deficiency of conventional money is that, for far too many, it is simply not available…And as conventional money must come from outside the local community, it inherently doesn’t understand or concern itself with the needs of a particular community”.

And that is why LETS was invented, to facilitate much-needed trade within circuits in local neighbourhoods, villages and towns. LETS is known as a mutual credit system, meaning a currency that is created by a simultaneous credit and debit in a transaction. Being a mutual credit system, the LETS money supply is self-regulating. This is because members issue their own currency within the framework of their community. This enables participants to use what is available within their trading community, which overcomes the limitations imposed by a scarcity of national currency. And, since open records are kept of both credit and debit, LETS is also customarily transparent. Combined with its self-regulating nature, this transparency promotes greater trust, since people are held more accountable.

OK, so the Local Exchange Trading System is designed to better facilitate trade in local communities, but what about turning conventional thinking on its head? Well, with conventional money, if you have a negative balance, that is a bad thing. But as far as LETS is concerned, a negative balance is no problem at all. Quite the contrary in fact, because a negative balance shows that people have been buying goods and services from others in their local community. It is therefore an indication of community activity. If you are a member with a negative balance, you can be called upon to offer goods and services in return, which has the effect of further increasing the community’s wealth.


Maybe it comes as a surprise to learn that there are all these different kinds of money working in tandem with conventional money? But if you stop and think about it, it is not such an unheard-of thing. Most of us, I guess, have used local currencies in the form of gift vouchers that are valid only in a certain store. And the idea of a currency purpose-built to match an unmet need with an underused resource is most popularly known in the form of commercial loyalty currencies such as frequent flyer miles programs that airlines have been using for decades (in this particular case, from the perspective of the airline, the unmet need is customer loyalty and the unused resource is empty seats). Currently, there are approximately four thousand mature cooperative currencies operating around the world, mostly in Latin America, Continental Europe, Japan and Australia. Most of these monetary innovations have tended to be relatively small in scale, consisting of struggling local communities seeking ways of getting the fundamental circuit of buying and selling working again.

But, despite their mostly modest scale, we should not be dismissive of these monetary innovations, because they are proof of principle that society can lift itself out of poverty, create more work, build sustainable networks (and more besides) all without needing to raise taxes or by securing funding from government departments and agencies. We are talking about communities who have found that, by creating new kinds of cooperative currencies that work in tandem with conventional currencies, the features of scarcity and hypercompetitiveness that predominate in the conventional system can be shifted toward new options that encourage more social cohesion and more efficient matching of underused resources with unmet needs.

Attorny Edgar Cahn devised ‘Time Dollars’, which is a cooperative medium of exchange backed by time. One time dollar is equal to one hour of service. Meltem Sendag, who helped found a Timebanking network in Istanbul, said:

“We both want to move from the competitive society, which we both experienced working in the corporate world, to one of cooperation. With our former careers, we would have had to live with the values we do not believe in…Now, with the Timebanking community, we are experiencing what it would be like if the world were designed for generosity…experimenting with the idea that we have what we need if we use what we have by trading services and acts of goodwill, thereby emphasising the values of time and relationships”.

Are these innovations destined to remain solutions by and for smallish communities, or are we potentially seeing the development of something grander in scale? According to futurist John Nesbit, “change occurs when there is a confluence of both changing values and economic necessity”. I think that what we are seeing here is a shift from a monetary monoculture, one in which debt-based fractional reserve systems controlled by governments and banking cartels dominate, to a monetary ecology where the power returns to communities operating at different levels of society.


What would be the economic necessity that would drive this transformation? Most likely, it would be the realization that an economy based on endless growth and extreme concentration of wealth is completely at odds with long-term sustainable community building. It so happens that the current economic downturn is resulting in significant increases in the development and adoption of cooperative currencies around the world. The more people see that it is possible to build communities around non-zero sum gains, the less they are likely to put up with the aggressive ‘all for myself and nothing for others’ attitude.

No doubt the Internet, that greatest of computational and communications technologies, will play a major role in facilitating this transformation. This is partly because computers would be so handy in crunching the numbers involved in the multilateral barter systems cooperative currencies make possible. You certainly would not want a frequent-flyer miles program run by countless clerks shuffling papers! But, perhaps its more important job will be as a communications tool, one in which increasing numbers of people add to the voice speaking out about the current system, one which crushes the entrepreneurial spirit and denies decent living to billions, and the real possibility of a viable alternative to corrupt finance, inescapable poverty and environmental destruction.


Ok, so what would this money ecology look like? Before talking about that perhaps we should remember the caution not to demonize the current system. It is not inherently evil or anything, it is merely an imperfect work-in-progress that needs fixing, same with all technologies. Particularly in the last lecture, I said some harsh things about interest, inflation, growth, consumption and banks, but any monetary ecology that aspires to build a better civilization had better understand that all these do good as well as harm.

Take interest, which I objected to in the last lecture for creating debt that cannot be repaid and concentrations of wealth that have nothing to do with ability. Despite these dubious consequences, there are legitimate reasons to apply interest to a loan. If you are a lender, you will want some protection against defaults. If, say, five percent of borrowers are expected to default on their loans, charging five percent interest will ensure that at least the entire principle is paid back. Since interest acts as a fair precaution for lenders, it would be unwise to simply abolish it.

Then again, we certainly do not want to retain current outcomes such as short-term thinking and unearned concentrations of wealth, so what to do about that? Many cooperative currencies apply demurrage, which works in the opposite way to interest. In other words, whereas with interest money that sits in a bank increases in value, demurrage causes money to lose value if it is held onto for too long. This may seem like a strange idea if you are used to money that is both a unit of exchange and a store of value, but remember that cooperative currencies tend to be mediums of exchange exclusively. The whole point of them is to get an economy moving again and a demurrage charge provides an incentive to spend that money before it begins to lose value. If such a currency is designed to be counter-cyclical, cooperative currencies carrying a demurrage fee can balance out the effects of interest-baring fiat money. As we saw with the WIR, cooperative currencies tend to be issued in greater quantities when an economy is on a downturn and banks are not inclined to make loans. Another advantage of demurrage fees is that, unlike regular interest, it does not contribute to enormous concentrations of wealth and that means there is less income disparity and greater equality. Having demurrage-baring cooperative currencies working counter-cyclically with interest-baring currencies therefore smooth’s out the boom and bust phases of the business cycle, leading to stronger communities rather than money eroding social capital.

All this talk of issuing new kinds of money seems to be ignoring a serious and undesirable consequence: It would create uncontrollable inflation. But that objection is only valid if applied to the issuing of fiat money. Local currencies can be designed specifically to avoid contributing to inflation. Remember, how, in the last lecture, we saw how inflation results whenever there are insufficient goods and services produced for the quantity of money in circulation? Well, mutual credit systems like LETS facilitate multilateral barter, which means that for every credit generated there is a simultaneous creation of a debit within the same community. Because the supply of products and services is simultaneous with the creation of the currency, such currencies are designed to not create inflation. By the way, as was the case with interest, inflation is not all bad so later on I shall talk about ways in which it can do useful things in an economy designed to serve the people rather than the self-serving interests of a few.


So, then, a monetary ecosystem: What might it look like and what is it supposed to achieve? Its main goal, I believe, should be to enable us to abandon an economy that prioritises short-term thinking over long-term planning, and endless consumption, for one that is sustainable and socially responsible. According to John Boik, who is a medical doctor specializing in cancer by profession but now applies his expertise to natural systems of governments, there are two key mechanisms of contemporary society that make it unsustainable:

1. The financial system demands continuous growth.
2. Financial and political power is centralized within a small subset of the population.


The thing with money is, it is like god: If it did not exist it would be necessary to invent it. This fact is illustrated by something that happened in Ireland during the decades of 1966 to 1976. During that time, there were three separate bank strikes that caused the banks to shut down completely. It did not take long for the Irish to realize that, if the banks were closed, nothing prohibited writing a check and using it like cash. Once official-issued checks were used up, citizens created their own checks using supplies from local stationary shops and news agents. Antoin E. Murphey, who is economics professor at Trinity College, Dublin, said:

“The Irish created an unregulated, totally anarchistic community currency matrix. They were operating on the basis of the Irish pound at the time. But there was nobody in charge and people took the checks they liked and didn’t take the checks they didn’t like. So the whole world revolved around that simple fact. And it worked! As soon as the banks opened again, you’re back to deprivation and scarcity. But until that point it had been a wonderful time”.

What happened in Ireland, and what is evident from various other cooperative currencies around the world, is that people can get on with their lives without centralized authority and financial institutions. It should be pointed out, though, that the Republic of Ireland at that time had a small population, which meant there was a high degree of personal contact among members of the community, even in cities. Knowing one’s clientele very well is what enabled a trust-based system to work. As Murphey joked, “one does not after all, serve drinks to someone for years without discovering something about their liquid resources”.

Obviously, in modern cities there is a lot less personal contact and, consequently, less information regarding credit-worthiness. That could change if the Internet, smart phones and all that enables us to create spaces where much more information can be pulled into a decision and interconnectivity empowers both the individual and his or her community. In that case, life would be more transparent and democratic, and possibly the ‘anarchistic community matrix’ could work on a larger scale. But until then, such systems will be a small part of the money ecology.


Bernard Lietaer and Jacqui Dunne, authors of ‘Rethinking Money: How New Currencies Turn Scarceity Into Prosperity’, describe what a money ecosystem might look like. They think of it as consisting of many monetary systems designed to work at various scales. At the largest (global) scale, there would be a ‘global reference currency’, which is a “new non-national currency… designed both to provide a safety net to support the conventional monetary system and to mobilize global corporations toward a sustainable future”.

The authors point out that goals like sustainability are more effectively accomplished via strong financial incentives rather than regulation, legislative imperatives or moral prodding, and highlight the so-called ‘war against drugs’ as evidence that “whenever attempts at regulation or moral persuasion run up against financial interests, the latter tends to win”.

An example of a supranational cooperative currency would be the ‘Terra Trade Reference Currency’, which is designed to address several key issues that are global in nature and, thus, beyond the scope of any individual nation’s ability to repair. Specifically, it targets three systemic economic issues:

1. Alleviating the problem of monetary instability.
2. Curtailing booms and busts of the business cycle
3. Making long-term sustainability possible.

According to Bernard Lietaer and Jacqui Dunne, the TRC (who’s unit of account is called a ‘Terra’) works in parallel with the current international monetary system, providing a mechanism for worldwide contractual, payment, and planning purposes. Think of its purpose as being similar to the old Gold Standard: Providing a robust, inflation-resistant standard of value.


One layer down we find multinational currencies. Bernard Lietaer and Jacqui Dunne write:

“It has indeed become obvious that regional economic integration can reach maturity only when a single currency levels the playing field for all economic participants”.

Along with something that evolves from the Euro, the authors foresee multinational currency zones forming in Asia, thanks to a deal between China and Japan, and that a reform of the Dollar will give rise to the ‘Amero’, a multinational currency for the North and South Americas.

Another form of international currency is ‘International Corporate Scrip’, the first large-scale application of which were airline loyalty currencies. The company Apple has two hundred million users accessing its iTune store, providing it with perhaps more direct customer billing relationships than any other company. A smartphone that can debit a credit account can just as easily credit it as well. Talking about these international corporate scrips, the authors of ‘Rethinking Money’ write:

“The net result will be that several corporate scrips will be competing on the Internet… some (may) create special subsidiaries, with strong and liquid balance sheets, to issue these currencies and imbue them with greater creditability”.


Next level down we come to the currencies we are most familiar with: National currencies like the Pound and the Franc. Given that the age of decadence is driven to a large extent by power power’s sake, and the monetary system as it is provides immense power for those who control it (Amschel Rothschild famously said, “give me control of a nation’s money supply, and I care not who makes its laws”) the question arises as to whether governments and the banking cartel will fight the establishment of a money ecosystem.

There are examples of cooperative currencies being effectively run out of town by the dominant banking system. A large number of cooperative currencies arose in the aftermath of the German hyperinflation that took place in the 1920s. One such cooperative currency was the ‘Worgl’, invented by Micheal Untergenberger who was mayor of the town that gave the currency its name. The town of Worgl had thirty percent unemployment and Untergenberger’s idea to get the town back to work was to create a currency that functioned soley as a medium of exchange and with a demurrage charge to ensure its circulation. The Worgl lasted thirteen months, during which time the council carried out all intended works projects, built new houses and a reservoir, and became the only town in Austria with full employment.

Other towns and villages took note of the Worgl’s success, and it was not long before over two hundred towns and villages adopted it. That was when the Austrian central bank panicked and asserted its monopoly rights by making the issuing of Worgls a criminal offense. The town of Worgl returned to thirty percent unemployment almost overnight.


Could the same thing happen with regards to the monetary system? I suppose it could, but we are trying to take an optimistic perspective here. So, let’s focus instead on the alternative. As the Internet communicates success stories of money being re-invented to resolve the inadequacies of regular money, and the impossibility of reconciling a monopolistic debt-based currency that demands perpetual growth with long-term sustainability becomes more apparent, the weight of popular pressure may demand that national currencies change to better suit the non-zero sum achievements and greater social cohesion that a monetary ecosystem would help make possible. Assuming that national currencies become part of a monetary ecosystem, they would continue to play an important role in countries that have not joined a multinational currency integration system.


Next level down we come across ‘Regional Currencies’. According to Bernard Lietaer and Jacqui Dunne, “genuine regional development requires a regional currency. If the funding for such strategies is made available only from the federal level, there will be less flexibility and creativity than if both state and federal levels create their own currencies”. Regional currency projects are being spearheaded in Austria and Germany, where they are generically known as ‘Regios’. Regios complement the Euro, and are designed to give regions the necessary autonomy to deal directly with their particular social, ecological and financial problems.

To give one case in point, net cash flow spent by big business usually flows in the direction of corporate headquarters outside of the region. For example, an evaluation of independent businesses in Chicago found that, for every $100 spent with a local firm, $68 is left in the Chicago community, whereas for every $100 spent in a chain store, only $43 is left in the Chicago community.

Currently there are some thirty four types of regio operating in the regio network, each with a different name, structure, and purpose, tailor-made to meet the specific needs of a given region. One such regio is called the Chiemgaurer, based in Bavaria, southern Germany. Designed by six teenagers at the Rudolph Steiner school, Chiemgaurer supports local production and enterprise by encouraging locals to shop at neighborhood businesses rather than chain stores. Regional nonprofit organizations wishing to participate in the system pay ninety seven euros per one hundred chiemgaurers, and the latter currency can then be used to purchase goods and services in participating stores. It is possible to have the chiemgaurers cashed back into euros, but a penalty of five percent discourages this. At the end of the process, ninety five percent of profit remains with the business, three percent goes to the nonprofit chosen by the buyer, and two percent goes to the chiemguarer currency administration to cover overheads.

Margrit Kennedy, who in 1987 wrote the book ‘Interest and Inflation-free money: Creating An Exchange Medium That Works For Everybody And Protects The Earth” said of regio currencies:

“The time outlay is considerable: It takes three to five years until you get into the zone where the whole operation can be self-financing, so it’s not a trivial task. Those who run these groups do it because they love it. They really feel they are doing something useful”. This feel good factor can be attributed to the fact that, by using a regio currency such as the chiemgaurer, participants have a stronger feeling of belonging to the local community.


Next level down we come to local cooperative currencies, which are designed to link unused resources with unmet needs within a specific geographical area, business or segment of society. Bernard Lietaer and Jacqui Dunne foresee more local currencies being created to facilitate local exchanges between members as the information revolution erodes production and service-related jobs (that is, jobs considered economically viable under conventional money, which does not always coincide with the needs of local communities, as we have seen).

Finally, we come to the most localized level of all, that of functional currencies. Whereas there would be, by definition and necessity, only one global reference currency, there could be millions of different kinds of functional currencies working within the money ecology. A functional currency is one designed to bring about a particular outcome. Want to encourage good behavior and discourage bad practice? Ebay did and so they implemented a reputation currency in the form of seller ratings. Want to encourage and improve learning and education? Then why not see what a learning currency like the sabre, talents, or algres can do for you?

Let’s take a closer look at the Sabre. It gets its name from the Spanish and Portugese word meaning ‘to know’ and is a specialised education paper currency allocated to primary and secondary schools, particularly in depressed areas. Sabres are first given to the youngest students, who use it to fund tutoring help from older students. Those in turn use the sabres they earn to buy mentoring from older students, and at the end of the chain we have seventeen-year-olds using sabres to pay for part or all of their university education.

What you gain from using the Sabres education currency is a more effective retainment level compared to conventional teaching methods. That involves lecturing and reading through which, respectively, five to ten percent of what is taught is retained. Compare that to the ninety percent retention rate which applies to whatever one teaches to others. According to Bernard Lietaer and Jacqui Dunne, “when the learning retention rates increase from five to ten percent (normal education methods) to ninety percent (teaching others)…spending $1 billion through the sabre system could roughly be estimated to generate as much as $100 billion worth of retained learning, in comparison to the conventional grants approach”.

So that is the money ecosystem, comprising of many layers of monetary systems, from one global reference currency to a few international currencies, to multitudes of local currencies and, finally, countless functional currencies. The further down we go, the more money becomes designed to tackle localized, specific problems. Conversely, the higher up we go, the more money addresses national or international concerns. This certainly does not mean our purses and wallets will become over swollen with all these new monies; any one individual or business would only participate in a few of these systems.


We are nearly done, but there are a few points left unaddressed. I said earlier that the monetary ecosystem could provide an incentive to change national currencies. I said earlier still that not all inflation is bad.

Inflation is bad when you have an unrestrained money supply chasing a constant quantity of wealth. It should really be the other way around: a fixed money supply that is used to purchase a variable amount of wealth. Governments that were interested in establishing money supply stability could use legislation to stop banks creating money at will. We would need to know how much money should be in circulation, so economists would calculate what that figure should be, aided by statisticians’ predictions of changes in population size. Politicians could agree on a mechanism for increasing or decreasing the money supply so that it remains constant relative to the population.

Under such conditions, one in which the money supply is constant in relation to the population, additional wealth creation would drive prices down and a reduction in wealth creation would cause prices to rise. In this scenario, inflation is not necessarily problematic; less wealth creation and associated price increase could result from people simply being happy with less.

So long as profitability and bonuses are linked to making loans by creating new money, the real economy of goods and services will continue to be undermined by the banking system. The real economy should not be sacrificed to the selfish interests of the banking and financial sector; rather those should be services supporting the production of goods and services that make a positive difference to people’s lives. In ‘Creating New Money: A Monetary Reform For the Information Age’, James Robertson and Joseph Huber say that banks should act purely as credit brokers, that is they should act as intermediaries between savers and borrowers and provide a safe haven for people’s money. The role of the central bank, they say, should be to issue whatever quantity of money is necessary to ensure adequate levels of investment. The government would spend this money into circulation, and if the money supply grew too much, it could be reduced by the government spending less than it received in tax revenues.


When the USA began its industrial revolution, it was Abraham Lincoln’s view that plants would be owned by those who worked in them. Under such a scheme, businesses are not pressured into having to deliver dividends to absent shareholders, and whenever increase in productivity efficiency is achieved, its benefits are distributed among the workforce in the form of increased wages or reduced working hours. The result would be employees reaping the benefits of their investment. Earnings would be spent on wealth created by others- genuine wealth in the form of beneficial goods and services- and thus there would be a steady circular flow of money between consumption and production.

One company that is owned by its workers is John Lewis. The ‘John Lewis Partnership’ is a company owned by a trust on behalf of all employees, who have a say in how the business is run and also receive a share of annual profits. Of course, not everybody earns the same; like every other business, John Lewis pays market rates to recruit and retain the best senior staff. But because it has no obligations to absent shareholders, its profits are distributed among its employees, ensuring even the most junior staff takes home a decent wage.


By any rational and moral argument, natural capital is the birthright of all Earth’s citizens. In that case, something has to be done about private land ownership and a taxation system that supports unearned wealth. Perversely, the current tax system mostly targets the wrong things- labor and enterprise rather than consumption and resources- and the result is an unnecessary burden on wealth creation and the encouragement of unsustainable exploitation of natural resources. Some countries collect a proportion of unearned wealth through property taxes, but this is usually seen as a way of topping up conventional tax revenues. But the rational and moral argument comes down decisively on placing the tax burden on revenues derived solely from use of land and the natural resources it contains. Note that such a scheme does not disallow the ability to make profits if you are a landowner. You could make investments to improve your land and since that would involve an expenditure of labor and capital, you should be able to profit from the effort you have expended and the investment you risked. That is quite different from any increase in wealth due to the general uplift in land values. That, after all, results from the efforts of the wider community and not the land owner.


Any scientifically valid economic model has got to take into account which forms of growth are bound by physical laws and which are not. Again, this places the tax burden on consumption of physical resources, which obviously cannot be exploited without limit. Unrestrained growth is not always destined to have harmful consequences. Nothing but benefits would come, for example, if one’s knowledge base continues to grow exponentially. Therefore a monetary ecosystem that seeks long-term sustainability will encourage the ephemeralization of money and banking by moving them out of the physical world and into the virtual. Gone would be bank branches, ATM networks and physical money. Banking would be a pure relationship business accessible through web-enabled devices.

When you consider that, in Uganda circa 2005, there were just one hundred ATM machines for twenty seven million people and when you consider that opening an account in Cameroon costs more than most make in a year, it becomes apparent that ever-cheaper computing and growing access to the Internet will dramatically change the global banking scene, facilitating greater prosperity and further innovations as billions of currently disenfranchised people join the money ecosystem. As the authors of Rethinking money said:

“An economy of relationships is trying to emerge: An economy in which interconnectivity empowers the individual, along with his or her various communities, evolving into a more democratic, transparent, and viable economic life, enabled by various consciously created currencies operating at all levels of society, from neighborhoods to the world at large”.

This sentiment was echoed by Jean Luc Rox, a member of the Brussel’s chapter of the HUB network, a social enterprise operating in over twenty six countries worldwide:

“What happened since we established the system? We see increasing relationships between social entrepreneurs…Before, people were working alone, looking at each other not necessarily as a friend.. but more as a potential competitor. And now, because they can offer services among themselves, they see they have more to win by working together”.

As is usually the case, Nature discovered the benefits of cooperation long before we did. In a lecture I gave a couple of years ago, I talked about how evolution achieved greater orders of complexity through organizations of societies:

Transition one: The increasingly complex biochemical systems that ultimately evolved into bacteria-like organisms.

Transition two: The combination of bacteria-like organisms into cells, resulting in the eukaryotic cell.

Transition three: The organization of eukaryotic cells into multicellular life.

Transition four: The organisation of individual animals into social groups and networks such as tribes, villages, towns, and nations.

The human animal has developed societal organizations so large they impact on the international scale and may very well affect the future course of evolution itself. If we are to achieve long-term stability and better standards of living for all we have to learn that individual achievement is a reflection of strong teamwork. We have to understand that we are one global family, bound by physical laws to evolve efficient economic market systems that take us away from aggressively competitive zero-sum behavior and toward methodologies that enable winners to flourish in an environment of non-zero sum, socially beneficial activities. As I have tried to show in this lecture, communities of various scales, from groups of people in small towns to multinational companies, are re-inventing money so as to aid rather than discourage this outcome. These innovators are therefore doing their bit in bringing about the transition to a new era of civilization, one much better placed to make the best and widest possible use of the amazing transhuman capabilities which our tech gurus see coming over the horizon.

* hero image used from